USA – NEW YORK Trends and Developments Contributed by: Bradley Nash, John Curley and Dorothea Regal, Hoguet Newman Regal & Kenney, LLP
defend by invoking the policy’s pollution exclusion. The Town brought a coverage action. At issue was the interplay of two provisions in the pol- icy’s pollution exclusion. First, the policies excluded coverage for claims “directly or indirectly occasioned by, happening through or in consequence of... pol- lution and contamination of any kind whatsoever”, “unless caused by or resulting in a crash fire explosion or collision or a recorded in-flight emergency causing abnormal aircraft operation”. Separately, the policy’s “Combined Claims” provision stated that the insurers “shall not be required to defend... a claim or claims covered by the policy when combined with any claims excluded”, but would only reimburse the insureds for that portion of its defence costs that “may be allo- cated to the claims covered by the policy”. The underlying New York State Department of Envi- ronmental Conservation (NYSDEC) claim was vague as to the cause of the airport’s PFAS contamination. However, it was undisputed that “one alleged source of contamination at the Airport is firefighting foam that was used in response to crashes or similar events” (id, at *18). Thus, the court held that the Town had met its burden to establish that the pollution exclu- sion’s exception for pollution caused by “a crash fire explosion” was at least potentially triggered (id). The insurers accordingly “have a duty to defend the Town unless and until that possibility is foreclosed ‘with cer- tainty’” (id). Next, the insurers argued that the “Combined Claims” provision was triggered because the underlying con- tamination claim involved a mix of covered and uncov- ered causes. Accordingly, the insurers contended that they should have no duty to pay any defence costs until the insured could establish a basis to allocate a portion of the defence costs to a covered cause of loss. The court rejected this argument, holding that the insurers had misconstrued the meaning of the term “claim”. The policy did not define the term, but applying its plain meaning (ie, “a demand by a third party against the insured for money damages or other relief”), the court determined that there was only one “claim” – the environmental contamination proceed- ings commenced by the NYSDEC (id, at *12–13). A single claim with multiple underlying causes was nev-
ertheless a single claim, and the “Combined Claims” provision was therefore inapplicable. Related Claims Under Claims-Made Liability Policies Claims-made liability policies generally cover claims made against the insured during the policy period. However, there is an important exception. Many poli- cies have provisions that treat “related claims” as a single claim made at the time the earliest such claim was brought. The Appellate Division, First Department (New York intermediate appellate court in Manhattan) construed such a related claims provision in Zurich Am. Ins. Co. v Giorgio Armani Corp. , 238 A.D.3d 81 (1st Dep’t 2025), holding that three lawsuits by separate plaintiffs alleg- ing sexual harassment and assault by an employee of Giorgio Armani Corp. (GAC), Javier Herrera, were sufficiently related to be deemed a single claim. The policy defined as related “all Wrongful Acts that have as a common nexus any fact, circumstance, situa- tion, event, transaction, cause or series of causally connected facts, circumstances, situations, events, transactions or causes”. GAC faced three separate lawsuits based on Herre- ra’s alleged misconduct. Although brought by sepa- rate plaintiffs, each was premised on allegations of GAC’s knowledge of – and failure to address – Her- rera’s actions. Reversing the trial court’s decision in favour of the insured, the Appellate Division observed that the policy provided a “broad test” for relatedness. The motion court had relied on the Court of Appeals’ decision in Roman Catholic Diocese of Brooklyn v National Union Fire Ins. Co. of Pittsburgh , Pa., 21 N.Y.3d 139 (2013), which “addressed whether sepa- rate acts constituted a single ‘occurrence’”. But the Appellate Division found this precedent inapplicable to the related claims analysis. The court held that the three actions for which GAC sought coverage met the standard because they all alleged the same mis- conduct, with the later filed complaint expressly ref- erencing the other claimants’ earlier-filed allegations. Indeed, that complaint relied on the earlier allegations for its theory of liability, asserting that but for GAC’s failure to take action after receiving the earlier reports of Hererra misconduct subsequent victims would
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